If you have been following the recent woes of global stock markets, then you know that the U.S. technology sector is a victim of this recent downturn. It seems like Yelp, despite posting smaller than expected losses, has been unable to avoid the massive technology selloff caused by the downturn. After the release of its earning reports on Monday, its shares plummeted 11%, followed by, as of right now, another 3% drop in trading today.
Yesterday, Yelp saw its earning results reported a whole 3 hours earlier than they were suppose to be. This was coupled with the sudden news that Chief Financial Officer Rob Krolik, who has been with the compny since 2011, would be stepping down later this year. The early reporting of numbers paired with the CFO shake-up, and the overall volatility in the technology sector seems to have been the main reason for the stock plummet. Everything happened all at once which seems to have spooked investors despite the relatively strong earnings report.
Yelp was forecasted to lose 3 cents a share, but was able to beat that estimate by a whole cent, posting a loss of only 2 cents a share on an adjusted basis. Due to the strength of its advertising business and a rise in mobile usage, the company was able to post a 40% rise in revenue, again topping analysts estimates. While the stock drop is not what Yelp was looking for, this earnings report does show a lot of positives for the company.
Looking to the future, Yelp is looking to again beat analysts estimates this quarter. By employing an aggressive $14 million marketing campaigned paired with expansion into more international markets and diversifying into services including restaurant bookings, event management and payments they hope to counter increased competition and start on a track to profitable growth.
Source: Reuters
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